RBS shareholders vote for long-term bonus scheme

Royal Bank of Scotland may raise the share price targets at which executives receive their bonuses, making it harder for them to gain payouts and allaying anger at payments.

At the part-nationalised bank's annual shareholder meeting more than 99% voted to back a new long-term incentive plan after talks with institutions.

RBS said it was conscious of shareholder views on the 50p share price trigger for payouts - seen by many as too low after a share price rally this year - and would take those views into account when it finalises the target after a trading update next week. Shares are now trading above the original target level.

UK Financial Investments, which manages the government's 83% holding in the bank and will be instrumental in the gradual disposal of that stake, said it backed the new plan and the inclusion of an absolute share price target linking management pay with value for taxpayers.

RBS shareholders were concerned that the bank's bonus culture had yet to change.

Shareholder John Horrocks told the board the new rules simply implied that "instead of loading sackloads for individuals now, we seem to be delaying for three years".

"I don't share your view that investment banking salaries are obscene," chairman Philip Hampton told another shareholder questioning him on pay.

"It is the action of the market... If you don't pay market rates, this company isn't going to perform at market levels - and we want to perform above market levels. "We are under no illusions that we are out of the woods."

Hampton also said RBS was "on its knees" a year ago, but had made a good start in its turnaround plan. He said RBS was making good progress on its disposals programme, including the sale of payment processing arm WorldPay and 318 bank branches, although the sale or flotation of its insurance arm was unlikely before 2012.